Hertz U.S. Revenue Down 3% in First Quarter

Photo courtesy of the Hertz Corp.
Photo courtesy of the Hertz Corp.
Hertz Global Holdings, Inc. yesterday released 2015 first quarter operating results.

Total U.S. car rental revenue was $1.5 billion in the 2015 first quarter, down 3% from the 2014 first quarter. The company attributed the decline to a 1% decline in transaction days, a 2% decline in total revenue per day (RPD), lower fuel-related ancillary revenue, a higher mix of off-airport business and a lower mix of higher-rate international inbound business.

Transaction days were impacted by a decrease in airport rental volume, driven largely by lower discretionary leisure rentals, disruptions from winter storms and lower international inbound tour business, the company said. The lower airport volume was partially offset by an increase in off-airport volume.

International car rental segment revenue was $436 million, down 9% in the first quarter due to negative currency translation, but up 5% excluding currency effects, compared to the 2014 first quarter.

Hertz stated it has identified an additional $30 million in errors beyond those previously identified. Hertz said it still hopes to file audited financial statements by midyear. 

Operations Initiatives
In an effort to reach its goal of $200 million in cost savings by year end, Hertz said will close about 200 off-airport stores (or 5% of the off-airport total).  

Based on expected industry demand, Hertz said it has moderated its 2015 U.S. fleet plan to reflect a capacity increase of 1.5% to 2.5% over 2014 levels, in line with increases in GDP and airline passenger volume.

For the 2015 first quarter, the company expects that U.S. car rental monthly depreciation will be $290 to $300 per unit. U.S. fleet utilization was about 73% in the first quarter, unchanged from a year ago.

The company said it has implemented a broad-based price increase across its brands at U.S. rental locations starting on June 14, 2015. U.S. airport retail car rentals increased $5 per day and $20 per week, while off-airport retail car rentals increased $3 per day and $10 per week, the company said.

In terms of Hertz Equipment Rental (HERC), Hertz said it remains committed to the separation of its equipment rental business though the actual separation will not occur until after the company has completed its accounting review.

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